Investing in Gold When the Market Corrects

To seasoned stock-market investors, buying stocks on a correction is a frequent, and even time-honored, strategy. Their thinking is that if a public company has a good stock price at, say, $85.00 per share and then dips on a correction to $74.00 per share, the astute investor now has the opportunity to pick up that very same stock at a nearly 13% discount.

To unschooled investors, though, a lower stock price might pose a danger signal, and, as such, represent a cause for anxiety. Why did the stock drop in a matter of days? Did the company just announce a product recall? Is the stock an emerging market stock – or one from an economy that’s currency was walloped by the dollar or the yen? Or has the company been blindsided by the competition’s announcement of a new and better product?

While these remain possibilities, unless investors can readily determine a reason for a specific stock’s decline, the chances are its decline is part of a downward volatile movement of stocks in general. A 20% slide in the stock market is a sign of a new bear market. But a market drop between 10% and 20% indicates a correction.

October 11, in fact, stocks got off to a poor start for the third quarter because of poor corporate performance. So the Dow Industrial Average fell 1.1%, the S&P 1.2%, and the Nasdaq Composite 1.5%.

These declines, though disappointing to investors, amount to market weakness – not even a correction.

Like stocks, gold fluctuates according to market conditions. And whereas the novice might shy away from investing when the market declines, the seasoned investor will see a good opportunity in that same market move.

Last week’s activity in the yellow metal offers a good example of this kind of opportunity. During the week of October 3rd (2016), gold fell 5% — its largest weekly market loss in five years. But gold rebounded to the 1,250-1,260 level on the close.

Despite some slippage today, Wednesday, October 12, gold moved up on electronic trading to a $1257.00 close.

Given informed predictions of $5,000 -10,000 per ounce for gold, investors looking to build personal wealth would be wise to avail themselves of this strategically low price. It can’t stay at this level for very long. HSBC analyst Murray Gunn has issued a “red alert” for stocks.

If he’s right, the stock market could plummet, and not simply correct this time. A move down at this point could no longer be considered routine. Once this happens, professional investors will inevitably flock to gold to hedge their paper assets. And gold stands to skyrocket.

For more information, call 800-777-6177 now, and ask to speak to a Fortress Gold Group representative.